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The value of a computer is depreciated over ?ve years for tax reasons (meaning that at the end of ?ve years, the computer is worth $0). If a business paid $2,100 for a computer, how much will it have depreciated after 2 years?
Find how much it depreciates over one year by dividing the cost by 5; $2,100 ÷ 5 = $420. Multiply this by 2 for two years; $420 × 2 = $840. It will have depreciated $840.
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